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Strategies & Market Trends : Fidelity Select Sector funds -- Ignore unavailable to you. Want to Upgrade?

To: redwood who wrote (3830)	7/13/2001 7:19:17 PM
From: seminole	Respond to of 4916

GNMA bonds or GNMA funds have fluctuations in principal. The value of the bond or fund increases as interest rates fall and the value decreases as interest rates increase. GNMA bonds or funds also fluctuate as mortgages are refinanced. As the bonds (back by mortgages)are called, the fund must buy new bonds with new yields. Money market and CDs are the usual places to avoid principal risk. However, if you match the duration of a US bill, note, or bond with when the money is needed you also can avoid prinipal risk. need the money in 1 year, buy one year T bill. need the money in 2 years, buy 2 year note. need the money in 10 years, buy 10 year bond. 4.75% sounds good for a money market account, I would take it good luck.